Why Japan Is A Zombie Economy And Will Never Come Back

FIVE years ago China’s economy was half as big as Japan’s. This
year it will probably be bigger (see chart 1). Quarterly figures
announced this week showed that China had overtaken its ancient
rival. It had previously done so only in the quarter before
Christmas, when Chinese GDP is always seasonally high.

Since China’s population is ten times greater than Japan’s, this
moment always seemed destined to arrive. But it is surprising how
quickly it came. For Japan, which only two decades ago aspired to
be number one, the slip to third place is a gloomy milestone. Yet
worse may follow.